Goldplay Exploration Ltd. entered a nonbinding letter of intent to acquire Mako Mining Corp. subsidiary Marlin Gold Mining Ltd., with due diligence underway ahead of a definitive agreement.
Marlin Gold owns Oro Gold de Mexico SA de CV, which in turn owns the La Trinidad gold mine in Sinaloa, Mexico. Decommissioning is being undertaken at the operation, where mining resumed at the site in February in the wake of a hurricane in late 2018. Oro Gold also controls nine concessions adjacent to Goldplay's portfolio in the Rosario gold-silver mining district, also in Sinaloa.
Mako Mining expects consideration to include a nominal cash payment and a small net smelter royalty on concessions owned by Oro Gold. A binding exclusivity and nonsolicitation period extends from the signing of the letter agreement to Dec. 31, 2020, which could be extended for a fee.
The company also expects to be entitled to any insurance proceeds from claims related to hurricane damage against its insurers and reinsurers, which currently exceed US$7 million.
After the deal closes, Mako Mining plans to focus on its preproduction-stage San Albino gold development in Nicaragua, where construction is started.